Cutting timber to save jobs: the economics of forest management

At first glance, the economic questions surrounding
the sale of trees by the U.S. Forest Service to the timber industry
seem apparent:

Should timber sales be based on the amount needed to keep local
lumber mills open?

Should they be based on regional, national and international markets
for the products?

Or should timber sales be based on price alone, with the U.S.
Forest Service working solely on a profit motive?

But according to Jim Hagemeier, planning director for the U.S.
Forest Service office in Missoula, Mont., those questions don't
strike at the heart of the problem: "The economic part is a surrogate
of the real issue: How should U.S. forests be managed?"

That's where the debate begins. In the Gallatin National Forest
in western Montana, local lumber mills need more timber to avoid
temporary shutdowns, but environmental groups believe timber sales
should not be based on local economic needs. Just as in other national
forests, environmental groups are filing appeals on proposed sale
of Gallatin timberappeals that can cause delays for local
mills.

This spring Brand S Lumber of Livingston had to close its doors
for a total of three weeks during a six-week period. That meant
120 people were without a paycheck for those three weeks, according
to Doug Crandall, Brand S vice president.

Brand S has about six to seven months of timber under contract
with the U.S. Forest Service, Crandall said, and he needs about
two years of contracted timberbecause of roadbuilding and
weather-related factorsto ensure Brand S will run without
interruption. He blames environmental groups who are appealing timber
sales.

It takes about five years to establish a timber sale, Crandall
said, and those sales are environmentally studied before being approved
by the Forest Service. He believes environmental groups are abusing
the appeals processsimply appealing every sale, regardless
of the consequences.

"I'm concerned about it. The environmentalists know they've got
us. We've got to have some help," Crandall said referring to special
legislation aimed at opening up timber sales, "or we won't make
it."

The Gallatin Forest, where Brand S gets its timber, is located
in the Rocky Mountains of southern Montana, extending about 100
miles east to west and 125 miles north to south, where it borders
Yellowstone National Park.

There are about 1.7 million acres of national forest within Gallatin's
boundaries and approximately 330 wildlife species, including two
endangered species (bald eagle and peregrine falcon) and one threatened
species (grizzly bear).

Michael Scott, regional director for The Wilderness Society in
Bozeman, said he appreciates Crandall's concern for his employees
but insists the question of timber sales should address the overall
economic benefits to Montana. The U.S. Forest Service is taxpayer-supported,
he said, which means the timber industry is a subsidized industry
that is destroying an economic basethe forestswhile
it makes marginal returns on cutting some of those forests.

The timber industry is fast becoming more mechanized, anyway,
Scott said, and jobs will be lost in the future as more efficiencies
are realized. He said the timber industry supports 10,000 jobs in
the state, 20 percent less than 10 years ago.

Of the 45 to 50 billion board feet of timber consumed in the United
States each year, 12 billion comes from national forests. Of that
12 billion, three billion board feet are produced at below market
cost, according to Scott.

"Is what we are doing right? I'm not saying we should put timber
out of business, I just have a very fundamental disagreement with
the Forest Service," Scott said. "I don't see any time soon when
the arguments will be abated. This is not a problem with Doug Crandall,
it's a problem with the U.S. Forest Service."

While Gallatin provides a relatively small amount of timber compared
to larger forests of the Northwest, it presents special problems
because of its aesthetic and wildlife value, Scott said. Cutting
timber in Gallatin Valley results in point-source degradation that
forecloses future economic options, he said.

The beauty of Bozeman, which Scott referred to as "early Boulder,
Colo.," has attracted and could continue to attract much more high-tech
industry. But in order to do that the area must retain its natural
beauty, he said.

Also, when the "easy timber" has been cut in Gallatin, more important
wildlife areas are then marked for cutting, Scott said, and that
poses risks for wildlife species in the area.

"The timber industry basically takes the position that every tree
in the national forests should be cut," Scott said, and he believes
the Forest Service is beholden to the industry.

The Forest Service's Hagemeier strongly disagrees. He does concede,
however, that the Gallatin is not the most efficient forest. It's
a "below-cost forest," he said, which is defined by the Society
of American Foresters as: "[When] the net public benefits (NPB)
of a forest following timber harvest are less than if the timber
was not harvested."

But that doesn't mean there aren't some benefits, Hagemeier said.
Cutting in Gallatin allows for the removal of diseased trees and
burned logs and permits reforestation. While it would be cheaper
to simply burn some sections and get the same results, Hagemeier
said it is better to cut and at least get some local economic benefit.

Also, he defended the Forest Service's decisions to increase timber
sales to keep local mills alive. For example, he said if a mill
needs 25 million board feet to stay in business and the Forest Service
has opened 20 million for sale, the agency will find an additional
5 million.

"If the mill goes we've lost the ability to harvest," Hagemeier
said of the need to manage forest quality. "And we've lost the economic
advantages to the communities. We're not cutting the world off,
as Scott and others like to think."

Just because the Forest Service makes decisions regarding the
social and economic benefits to mills and communities doesn't mean
it automatically does the bidding of the timber industry, Hagemeier
said. Trees are not cut indiscriminately, he saidevery area
that's cut has been carefully studied to determine the environmental
impact.

When the Forest Service released its Land and Resource Management
Plan in September 1987, it presented 10 alternatives for the management
of Gallatin Forest. Of the 10, number seven was chosen by the Forest
Service; number nine was the environmentally preferred alternative.
Alternative seven was chosen, according to the report, because it
provided more income than number nine, allowed for an increase of
162 jobs rather than a loss of 76 jobs, and maximized the "net public
benefit while protecting the environment."

Montana is economically dependent on its natural resources, Hagemeier
said, and fast and far-reaching changes can have devastating consequences.
Economic relationships have been built over the years and much depends
on their stability, he said. "We tend to be very oriented to the
economic and social impacts of our decisions."

To be anything less, Hagemeier said, would spell the end of people
like Doug Crandall and his employees.